DGAP-News: ADC's banking investment, Union Bank of Nigeria (UBN), reports full year 2013 results

ADC's banking investment, Union Bank of Nigeria (UBN), reports full year 2013 results

DGAP-News: ADC African Development Corporation AG / Schlagwort(e):

Jahresergebnis

ADC's banking investment, Union Bank of Nigeria (UBN), reports full

year 2013 results

29.04.2014 / 18:38

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ADC's banking investment, Union Bank of Nigeria (UBN), reports full year

2013 results

53% loan book growth mainly in corporate banking

Operational transformation on track with advances in personnel, operations

and infrastructure reform

On-going sale of non-core subsidiaries to focus on core banking platform,

boost capital position and clean-up legacy assets

°

ADC's banking investment, Union Bank of Nigeria (UBN) released its 2013

financial year results, delivering gross earnings of NGN 121.4 billion (EUR

573.8 million) at group level, up 4% year-on-year, and NGN 103.2 billion

(EUR 487.8 million) at core bank level, up 7%. Profit before tax came in at

NGN 3.8 billion (EUR 18.0 million) at group level, up 31% year-on-year. At

core bank level, profit before tax excluding UBN UK and all non-banking

subsidiaries was NGN 4.2 billion (EUR 19.9 million), up 22% from prior year

results.

Group net interest income at the end of 2013, totaled NGN 57.4 billion (EUR

271.3 million), a decline of 9% compared with year-end 2012, while core

bank net interest income of NGN 55.1 billion (EUR 260.5 million) declined

by 6%. The reduction in net interest largely reflects declines in Nigerian

treasury yields, since 65% of UBN's interest earning assets at year-end are

held in either investment securities or interest earning cash. Furthermore,

interest from loans and advances was relatively inflated in 2012 due to

accrued interest on a large AMCON bond receivable which was repaid in 2013.

Group and core bank non-interest income increased to NGN 24.5 billion (EUR

115.8 million) and NGN 24.2 billion (EUR 114.4 million) respectively.

Net loans were up 43% to NGN 229.5 billion (EUR 1.0 billion) at group level

compared to the 2012 financial year and up 53% to NGN 210.1 billion (EUR

947.1 million) at core bank level. 85% of the total credit growth since the

beginning of 2012, at core bank level, occurred in the second half of 2013,

which is largely attributable to the growth in corporate accounts. The

recently appointed Head of Corporate Banking is building stronger

relationships with blue chip corporates and reactivating dormant accounts.

Deposits decreased by 8% at group level, but remained stable at core bank

level, ending the year at NGN 480.0 billion (EUR 2.2 billion). The cash

reserve requirement (CRR) on public sector funds increased to 50% in 2013,

and 75% in January 2014; reducing the banks yield on public sector

deposits. In the first half of 2013, deposits decreased to NGN 456.9

billion (EUR 2.1 billion) at core bank level, partly because of the loss of

public sector deposits. The second half of 2013, however, saw deposits grow

5.0%, an annualized rate of 10.0%, which is the fastest deposit growth rate

since ADC invested at the beginning of 2012.

Operating expenses were down 20% at core bank level to NGN 56.7 billion

(EUR 268.0 million) versus prior year figures, despite including

non-recurring expenses of NGN 7.8 billion (EUR 36.8 million) related to

staff restructuring, and an overall NGN 10.7 billion (EUR 50.6 million)

relating to exceptional transformation items. Cost-to-income ratio ended

the year at 85.8%, down from 95.3% at FY 2012. Gross loan-to-deposit ratio

was 48.1% at core bank level. UBN's liquidity remains strong, with a

liquidity ratio of 76% and room to grow its loan book by a further 52%

without raising more capital, or breaching the 80% regulatory threshold for

the loan-to-deposit ratio. UBN finished the year with a Capital Adequacy

Ratio (CAR) of 25%, well above the regulatory requirement of 15%.

UBN was exposed to developments in the Nigerian discount house sector in

the second half of the year, which contributed to an increase in the

overall impairment charge of NGN 12.1 billion (EUR 57.2 million) at group

level. The return on average equity (ROaE) in 2013 was 2.1% for group and

2.8% for the core bank, versus 0.7% and 1.8% respectively from the previous

year, reflecting the negative impact of one-off restructuring costs and

extraordinary provisioning due to the discount house crisis.

Core bank net interest margins ended 2013 at 9.4%, 160bps lower than FY

2012 due to declining Nigerian treasury yields as well as increased

exposure to higher quality, but lower margin corporate credits. Gross asset

yields were at 13.5%, down from 15.2% at FY 2012, while loan yields came in

at 15.9%, down 2.9% vs. FY 2012.

Karima Ola, Member of the Management Board of ADC commented: "2013 was the

first full year with UBN's new core executive management in place. The

management has been successful in making UBN a more stable and

customer-focused bank. UBN's transformation was a core part of the 2013

financial year, with multiple projects across all areas of the bank's

business. Personnel restructuring was successfully executed, with an

on-going recruitment process, while corporate and retail divisions put

significant efforts into their marketing, with targeted sales efforts and

customized products. The bank has invested significantly into technology

and operations as well as risk management and financial control. The

overall transformation aims to give the bank a competitive advantage in the

Nigerian banking industry, enabling UBN to outperform its peers in an

increasingly hawkish regulatory environment."

ADC's 2013 Annual Report is now available online:

www.african-development.com/en/investor-relations/investor-information/fin

ancial-reports/

About ADC

ADC African Development Corporation AG (ADC) (ISIN: DE000A1E8NW9;

Bloomberg: AZC.GR, www.african-development.com), is a German listed,

emerging pan-African banking group. ADC has a strong footprint in Southern

Africa via BancABC, a regional commercial banking platform operating in

Botswana, Mozambique, Tanzania, Zambia and Zimbabwe as well as exposure to

West Africa via Union Bank of Nigeria. In addition to its banking

operations, ADC has a private equity portfolio active in growth markets

across sub-Saharan Africa. ADC follows an active management approach with a

team of experts that comprise operational banking management, investment

banking and merchant banking expertise.

Kontakt:

Investor Relations

investor-relations@african-development.com

T +49 69 719 12 80 119

Ende der Corporate News

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29.04.2014 Veröffentlichung einer Corporate News/Finanznachricht,

übermittelt durch die DGAP - ein Unternehmen der EQS Group AG.

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verantwortlich.

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Medienarchiv unter http://www.dgap-medientreff.de und

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Sprache: Deutsch

Unternehmen: ADC African Development Corporation AG

Grüneburgweg 18

60322 Frankfurt/Main

Deutschland

Telefon: +49 69 719 12 80 119

Fax: +49 69 719 12 80 115

E-Mail: info@african-development.com

Internet: www.african-development.com

ISIN: DE000A1E8NW9

WKN: A1E8NW

Börsen: Freiverkehr in Berlin, Düsseldorf; Frankfurt in Open

Market (Entry Standard)

Ende der Mitteilung DGAP News-Service

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265515 29.04.2014